Manag., December-2019 – Q76
0. Which of the following is aptly described by ‘2/10, net 30’?
- Option : C
- Explanation : Nonfinancial firms commonly extend trade credit to their customers. A typical set of terms are 2/10 net 30. These terms mean that a firm which is selling a good or service is telling its buyer, “If you pay within 10 days you will get a 2 percent discount and, if not, the entire amount due has to be paid in 30 days.” By extending trade credit, the seller is providing financing to the buyer. And so the buyer has obtained two resources, not one, from the seller: the good or service that is being purchased and short-term financial capital.
